Moody’s downgrades Qatar’s credit rating to negative

5 Jul 17

Credit ratings agency Moody’s has changed Qatar's rating outlook to negative following a political crisis that has seen the country blockaded by its neighbours.

Moody's said it had downgraded Qatar's rating to negative from stable because of the economic and financial risks arising from the dispute between Qatar and Bahrain, Saudi Arabia, Egypt and the United Arab Emirates.

The company said the likelihood of a prolonged period of uncertainty extending into 2018 had increased and a quick resolution of the dispute was unlikely.

It warned that this carried the risk that Qatar's sovereign credit fundamentals could be negatively affected.

Moody’s left the country’s rating at Aa3, a move it said took into account “the sizable net asset position of the Qatari government and exceptionally high levels of wealth [which] will continue to provide significant support to the sovereign credit profile for the time being”.

Qatar’s neighbours had taken measures including severing diplomatic relations, closing land, sea and air links, and expelling Qatari nationals, and the tone of exchanges between them and Qatar suggested an early resolution of the dispute was unlikely.

Moody’s warned that the measures already imposed by the neighbouring states would hamper economic activity and that a prolonged period of uncertainty would damage business and foreign investor sentiment.

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